Google launches privacy plan amid protests

Analysts are split on how Google's new privacy rules, which went into effect on Thursday, will affect users -- and ultimately the company itself.

The rewritten and unified privacy policy, not the law of the Internet firm's land, lets Google combine data from most Google services.

Google has been notifying users about the impending change since late January via email announcements and notices on its search pages.

Google contends that the new rules don't veer from previous privacy policies. The company says the changes make it easier for users to see what information the company has collected about them while they use Google's free search engine, Gmail service, maps, browser and Android-based smartphones.

The company also notes that users still have control over how they use Google's online services and that private user information remains private.

Critics, however, say the new privacy policy gives Google free rein to parse together a user's personal information to find out what she is interested in, who she talks to, where she goes and, basically, who she is.

"You don't have to be a weatherman to predict that this move by Google is going to cause a firestorm of controversy," said Dan Olds, an analyst with The Gabriel Consulting Group.

"Just so far today, the first day of the new policy, we already have 36 U.S. state Attorney Generals weighing in with a strongly worded letter, and a pan-European privacy commission starting up an investigation. As details start to emerge, I think that the fire is just going to burn brighter," Olds added.

On Thursday, EU Justice Commissioner Viviane Reding announced that privacy agencies in European countries have concluded that Google's new privacy policy violates European laws.

France's data protection watchdog, the Commission nationale de l'informatique et des libertes (CNIL), announced this week that it had asked Google to postpone the new policy.

The CNIL also said it is willing to take the lead in an investigation into the legality of Google's new privacy policy. The agency said its preliminary research found that Google's new policy fails to meet the requirements of the European Data Protection Directive.

Google's new privacy rules consolidate the the bulk of policies it had into one policy, the company said. It combined more than 60 of 70-plus policies into a new main policy.

Google also said it has cut down on the Google Terms of Service and made them easier to read.

Google has been compiling information from users of its different services, like Gmail and Calendar, for some time. The new policy is different in that it includes user information across all products and services.

Critics were quick to complain that Google wasn't giving users an opt-out option for this consolidation of data. Instead, the company said if users didn't like their data being combined across services, they could simply stop using those services.

Google has maintained that there are ways for users to get around having their information culled and stored.

For instance, search queries are only linked to their identities of users who are signed in to their Google accounts. Gmail chats can be switched to "off the record" and people can use the "incognito" mode in their Chrome browsers, the company added.

Google's new privacy policy doesn't mean the company is collecting any more user data than they were before, said Patrick Moorhead, an analyst with Moor Insights & Strategy. Google is simply laying out their plan for collecting data and providing users with more targeted ads.

"This is a good thing for consumers and Google," he said. "Google knows more about what you like and dislike and in turn can charge more for advertising and provide better services. There is a small but loud contingent of people complaining, but on the whole, users don't really care.

"Facebook has consistently stepped over the line and on top of consumers' privacy and there hasn't been any impact to their active users," he added.

Moorhead also noted that users who don't want Google collecting their data can limit what they do with Google services while logged in to a Google account, browse in private modes, and not allow GPS location services.

The problem, though, is that value is added to many services when users login to accounts and have cookies, histories, or track location features activated, he admits.

Olds pointed out that Google isn't just collecting data from users of desktops and laptops. In fact, he said that users of Android devices may be surprised at how much of their use information is being collected and stored.

"[Google's] info-harvest is a rich mix, including who you call, how long you talk, where you were when you called, your phone number, device model, and other data," he said.

"Since it's your smartphone, all of the data is explicitly linked to you as a person, not as an IP address. Now imagine that all of this data can be matched up to what you do with Google search, Gmail, Google docs, and other Google services," Olds said.

Olds noted that the new policies let Google paint a very detailed picture of users, what they like and what they do. And they can sell that data and advertising access.

The best thing users can do if they don't want Google amassing a data store of their information is simply not use Google's services, says both Moorhead and Rob Enderle, an analyst with the Enderle Group.

"Simply put, users are getting a service or services for free because they are 'paying for it' by providing various degrees of personal information and Google will take as much of that information as they feel they need at any time," said Enderle.

"It would be advisable not to do anything on their services that you don't want known," he added. "Consider not using them for data that needs to be kept confidential."

Olds is betting that users will rethink what they do with free services -- whether Google's or another vendor's -- when they begin to see more ads in sidebars that directly relate to things that were just mentioned in an email they received or sent.

"They say that if you're playing poker with strangers and you can't spot the rube at the table, then you're the rube," said Olds. "There's a corollary for online services. If you're not paying for a product or service, then you are the product."

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